Foreign currency impact on results
Although CN reports its earnings in Canadian dollars, a large portion of
its revenues and expenses is denominated in U.S. dollars. The
fluctuation of the Canadian dollar relative to the U.S. dollar affects
the conversion of the Company's U.S.-dollar-denominated revenues and
expenses. On a constant currency basis, CN's net income for the third
quarter of 2015 would have been lower by C$107 million (C$0.13 per
diluted share). (1)

Third-quarter 2015 revenues, traffic volumes and expenses
Revenues for the third quarter of 2015 increased by three per cent to
C$3,222 million. Revenues increased for automotive (13 per cent),
forest products (12 per cent), intermodal (five per cent), petroleum
and chemicals (three per cent), and grain and fertilizers (two per
cent). Revenues declined for coal (13 per cent) and metals and minerals
(three per cent).

The revenue performance was mainly attributable to the positive
translation impact of the weaker Canadian dollar on
U.S.-dollar-denominated revenues; freight rate increases; strong
overseas intermodal demand, higher volumes of finished vehicle traffic,
and increased shipments of lumber and panels to U.S. markets. These
factors were partly offset by a lower applicable fuel surcharge rate;
decreased shipments of coal due to weaker North American and global
demand; reduced shipments of energy-related commodities including crude
oil, frac sand and drilling pipe; lower volumes of semi-finished steel
products and short-haul iron ore; as well as lower volumes of Canadian
grain versus the prior year's record crop.

Carloadings for the quarter declined by six per cent to 1,393 thousand.

Revenue ton-miles, measuring the relative weight and distance of rail
freight transported by CN, declined by six per cent over the
year-earlier quarter. Rail freight revenue per revenue ton-mile, a
measurement of yield defined as revenue earned on the movement of a ton
of freight over one mile, increased by 10 per cent over the
year-earlier period, driven by the positive translation impact of the
weaker Canadian dollar and freight rate increases, partly offset by a
lower applicable fuel surcharge rate and an increase in the average
length of haul.

Operating expenses for the quarter decreased by five per cent to C$1,735
million, mainly due to lower fuel costs and lower casualty and other
expense, partly offset by the negative translation impact of a weaker
Canadian dollar on U.S.-dollar-denominated expenses.

Update on recovery of President and CEO Claude MongeauClaude Mongeau had successful surgery in Montreal to remove a rare type
of soft-tissue tumour. Mr. Mongeau underwent a procedure to remove his
larynx and a voice prosthesis was placed in his throat. He is
currently receiving radiation treatment and is expected to return to
work early in the new year following his complete recovery.

"Claude is upbeat, recovering well, and remains engaged in the
business," said Robert Pace, chairman of CN. "We wish him a speedy and
full recovery as he focuses on his health.

"The Board has every confidence in the experienced leadership team to
continue to deliver strong results, and all of us look forward to
Claude's return."

Forward-Looking Statements
Certain information included in this news release constitutes
"forward-looking statements" within the meaning of the United States
Private Securities Litigation Reform Act of 1995 and under Canadian
securities laws. CN cautions that, by their nature, these
forward-looking statements involve risks, uncertainties and
assumptions. The Company cautions that its assumptions may not
materialize and that current economic conditions render such
assumptions, although reasonable at the time they were made, subject to
greater uncertainty. Such forward-looking statements are not guarantees
of future performance and involve known and unknown risks,
uncertainties and other factors which may cause the actual results or
performance of the Company or the rail industry to be materially
different from the outlook or any future results or performance implied
by such statements. To the extent that CN has provided guidance that
are non-GAAP financial measures, the Company may not be able to provide
a reconciliation to the GAAP measures, due to unknown variables and
uncertainty related to future results. Key assumptions used in
determining forward-looking information are set forth below.

2015 key assumptions CN has made a number of economic and market assumptions in preparing its
2015 outlook. The Company is assuming that North American industrial
production for the year will increase by approximately one per cent and
is now assuming U.S. housing starts in the range of 1.1 million units
and U.S. motor vehicle sales of approximately 17 million units, versus
its previous (July 20, 2015) assumptions of 1.2 million and 16.7
million, respectively. The 2014/2015 Canadian grain crop represented a
significant reduction toward the historical trend line after a record
2013/2014 grain crop, while the 2014/2015 U.S. grain crop was above
trend. For the 2015/2016 crop year, the Company now assumes that the
Canadian grain crop will be below the five-year average and that the
U.S. grain crop will be above the five-year average, compared with its
previous assumption that both crops would be in-line with trend
yields. CN also now expects 2015 customer shipments of energy-related
commodities, namely crude oil and frac sand, to be below 2014 levels,
versus its previous assumption of no growth. With these assumptions,
CN now assumes total carloads for all freight categories in 2015 will
be approximately 2 per cent below 2014 levels, compared with its
previous assumption that 2015 shipments would be comparable with those
in 2014. CN expects continued pricing improvement above inflation. CN
now assumes that in 2015 the value of the Canadian dollar in U.S.
currency will be in the range of $0.75 to $0.80, and that the average
price of crude oil (West Texas Intermediate) will be in the range of
US$45 to US$50 per barrel, versus its previous assumptions of
approximately $0.80 and US$50 per barrel, respectively. In 2015, CN
plans to invest approximately C$2.7 billion in its capital program, of
which approximately C$1.4 billion is targeted toward maintaining the
safety and integrity of the network, particularly track
infrastructure.

Important risk factors that could affect the forward-looking statements
include, but are not limited to, the effects of general economic and
business conditions, industry competition, inflation, currency and
interest rate fluctuations, changes in fuel prices, legislative and/or
regulatory developments, compliance with environmental laws and
regulations, actions by regulators, various events which could disrupt
operations, including natural events such as severe weather, droughts,
floods and earthquakes, labor negotiations and disruptions,
environmental claims, uncertainties of investigations, proceedings or
other types of claims and litigation, risks and liabilities arising
from derailments, and other risks detailed from time to time in reports
filed by CN with securities regulators in Canada and the United States.
Reference should be made to "Management's Discussion and Analysis" in
CN's annual and interim reports, Annual Information Form and Form 40-F
filed with Canadian and U.S. securities regulators, available on CN's
website, for a summary of major risk factors.

CN assumes no obligation to update or revise forward-looking statements
to reflect future events, changes in circumstances, or changes in
beliefs, unless required by applicable Canadian securities laws. In the
event CN does update any forward-looking statement, no inference should
be made that CN will make additional updates with respect to that
statement, related matters, or any other forward-looking statement.

2) See Forward-Looking statements for a summary of the key
assumptions and risks regarding CN's 2015 outlook.

This earnings news release, as well as additional financial information,
including the Financial Statements, Notes thereto and Management's
Discussion and Analysis, is contained in the CN Quarterly Review
available on the Company's website at www.cn.ca/quarterly-releases and on SEDAR at www.sedar.com as well as on EDGAR at www.sec.gov.

CN is a true backbone of the economy whose team of approximately 25,000
railroaders transports more than C$250 billion worth of goods annually
for a wide range of business sectors, ranging from resource products to
manufactured products to consumer goods, across a rail network of
approximately 20,000 route-miles spanning Canada and mid-America. CN -
Canadian National Railway Company, along with its operating railway
subsidiaries - serves the cities and ports of Vancouver, Prince Rupert,
B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the
metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago,
Memphis, Detroit, Duluth, Minn./Superior, Wis., and Jackson, Miss.,
with connections to all points in North America. For more information
about CN, visit the Company's website at www.cn.ca.

Selected Railroad Statistics - unaudited

Three months ended September 30

Nine months ended September 30

2015

2014

2015

2014

Financial measures

Key financial performance indicators

Total revenues ($ millions)

3,222

3,118

9,445

8,927

Rail freight revenues ($ millions)

3,011

2,920

8,918

8,440

Operating income ($ millions)

1,487

1,286

3,912

3,364

Net income ($ millions)

1,007

853

2,597

2,323

Diluted earnings per share ($)

1.26

1.04

3.21

2.81

Adjusted diluted earnings per share ($) (1)

1.26

1.04

3.26

2.72

Free cash flow ($ millions) (1)

690

775

1,741

2,045

Gross property additions ($ millions)

937

620

2,064

1,350

Share repurchases ($ millions)

417

365

1,250

1,095

Dividends per share ($)

0.3125

0.2500

0.9375

0.7500

Financial position

Total assets ($ millions)

35,823

31,673

35,823

31,673

Total liabilities ($ millions)

21,356

17,926

21,356

17,926

Shareholders' equity ($ millions)

14,467

13,747

14,467

13,747

Financial ratio

Operating ratio (%)

53.8

58.8

58.6

62.3

Operational measures(2)

Statistical operating data

Gross ton miles (GTMs) (millions)

109,740

115,348

331,839

333,067

Revenue ton miles(RTMs) (millions)

55,334

58,946

168,176

172,361

Carloads (thousands)

1,393

1,475

4,160

4,177

Route miles (includes Canada and the U.S.)

19,600

19,600

19,600

19,600

Employees (end of period)

23,929

25,032

23,929

25,032

Employees (average for the period)

24,305

24,915

24,905

24,412

Key operating measures

Rail freight revenue per RTM (cents)

5.44

4.95

5.30

4.90

Rail freight revenue per carload ($)

2,162

1,980

2,144

2,021

GTMs per average number of employees (thousands)

4,515

4,630

13,324

13,644

Operating expenses per GTM (cents)

1.58

1.59

1.67

1.67

Labor and fringe benefits expense per GTM (cents)

0.54

0.50

0.54

0.52

Diesel fuel consumed (US gallons in millions)

98.8

108.1

319.1

327.3

Average fuel price ($ per US gallon)

2.58

3.62

2.72

3.80

GTMs per US gallon of fuel consumed

1,111

1,067

1,040

1,018

Terminal dwell (hours)

14.2

16.0

15.2

17.0

Train velocity (miles per hour)

26.9

26.3

26.0

25.5

Safety indicators (3)

Injury frequency rate (per 200,000 person hours)

1.90

2.15

1.66

1.91

Accident rate(per million train miles)

1.79

3.24

2.25

2.69

(1) See supplementary schedule entitled Non-GAAP Measures for an
explanation of this non-GAAP measure.

(2) Statistical operating data, key operating measures and safety
indicators are based on estimated data available at such time and are subject to change as more complete information becomes available, as
such, certain of the comparative data have been restated. Definitions of these indicators are provided on our website, www.cn.ca/glossary.

Statistical operating data and related key operating measures are based
on estimated data available at such time and are subject to change as
more complete information becomes available.

(1) See supplementary schedule entitled Non-GAAP Measures for an
explanation of this non-GAAP measure.

Non-GAAP Measures - unaudited

Adjusted performance measures
Management believes that adjusted net income and adjusted earnings per
share are useful measures of performance that can facilitate
period-to-period comparisons, as they exclude items that do not
necessarily arise as part of the normal day-to-day operations of
Canadian National Railway Company, together with its wholly-owned
subsidiaries, collectively the "Company", and could distort the
analysis of trends in business performance. The exclusion of such items
in adjusted net income and adjusted earnings per share does not,
however, imply that such items are necessarily non-recurring. These
adjusted measures do not have any standardized meaning prescribed by
GAAP and therefore, may not be comparable to similar measures presented
by other companies. The reader is advised to read all information
provided in the Company's 2015 unaudited Interim Consolidated Financial
Statements, and Notes thereto.

For the three and nine months ended September 30, 2015, the Company
reported adjusted net income of $1,007 million, or $1.26 per diluted
share and $2,639 million, or $3.26 per diluted share, respectively. The
adjusted figures for the nine months ended September 30, 2015 exclude a
deferred income tax expense of $42 million ($0.05 per diluted share)
resulting from the enactment of a higher provincial corporate income
tax rate.

For the three and nine months ended September 30, 2014, the Company
reported adjusted net income of $853 million, or $1.04 per diluted
share and $2,251 million, or $2.72 per diluted share, respectively. The
adjusted figures for the nine months ended September 30, 2014 exclude a
gain on disposal of the Deux-Montagnes subdivision, including the
Mont-Royal tunnel, together with the rail fixtures (collectively the
"Deux-Montagnes"), of $80 million, or $72 million after-tax ($0.09 per
diluted share).

The following table provides a reconciliation of net income and earnings
per share, as reported for the three and nine months ended September
30, 2015 and 2014, to the adjusted performance measures presented
herein.

Three months ended September 30

Nine months ended September 30

In millions, except per share data

2015

2014

2015

2014

Net income as reported

$

1,007

$

853

$

2,597

$

2,323

Adjustments:

Other income

-

-

-

(80)

Income tax expense

-

-

42

8

Adjusted net income

$

1,007

$

853

$

2,639

$

2,251

Basic earnings per share as reported

$

1.26

$

1.04

$

3.23

$

2.83

Impact of adjustments, per share

-

-

0.05

(0.09)

Adjusted basic earnings per share

$

1.26

$

1.04

$

3.28

$

2.74

Diluted earnings per share as reported

$

1.26

$

1.04

$

3.21

$

2.81

Impact of adjustments, per share

-

-

0.05

(0.09)

Adjusted diluted earnings per share

$

1.26

$

1.04

$

3.26

$

2.72

Constant currency
Financial results at constant currency allow results to be viewed
without the impact of fluctuations in foreign currency exchange rates,
thereby facilitating period-to-period comparisons in the analysis of
trends in business performance. Measures at constant currency are
considered non-GAAP measures and do not have any standardized meaning
prescribed by GAAP and therefore, may not be comparable to similar
measures presented by other companies. Financial results at constant
currency are obtained by translating the current period results
denominated in US dollars at the foreign exchange rates of the
comparable period of the prior year. The average foreign exchange rates
were $1.31 and $1.26 per US$1.00, respectively, for the three and nine
months ended September 30, 2015, and $1.09 per US$1.00, for both the
three and nine months ended September 30, 2014.

On a constant currency basis, the Company's net income for the three and
nine months ended September 30, 2015 would have been lower by $107
million ($0.13 per diluted share) and $227 million ($0.28 per diluted
share), respectively.

Free cash flow
Management believes that free cash flow is a useful measure of
performance as it demonstrates the Company's ability to generate cash
for debt obligations and for discretionary uses such as payment of
dividends and strategic opportunities. The Company defines its free
cash flow measure as the difference between net cash provided by
operating activities and net cash used in investing activities;
adjusted for changes in restricted cash and cash equivalents and the
impact of major acquisitions, if any.Free cash flow does not have any standardized meaning prescribed by GAAP
and therefore, may not be comparable to similar measures presented by
other companies.

Three months ended September 30

Nine months ended September 30

In millions

2015

2014

2015

2014

Net cash provided by operating activities

$

1,652

$

1,328

$

3,847

$

3,246

Net cash used in investing activities

(1,023)

(552)

(2,166)

(1,220)

Net cash provided before financing activities

629

776

1,681

2,026

Adjustment: Change in restricted cash and cash equivalents

61

(1)

60

19

Free cash flow

$

690

$

775

$

1,741

$

2,045

Credit measures
Management believes that the adjusted debt-to-total capitalization ratio
is a useful credit measure that aims to show the true leverage of the
Company. Similarly, the adjusted debt-to-adjusted earnings before
interest, income taxes, depreciation and amortization (EBITDA) multiple
is another useful credit measure because it reflects the Company's
ability to service its debt. The Company excludes Other income in the
calculation of EBITDA. These measures do not have any standardized
meaning prescribed by GAAP and therefore, may not be comparable to
similar measures presented by other companies.

Adjusted debt-to-total capitalization ratio

September 30,

2015

2014

Debt-to-total capitalization ratio (1)

42.0%

36.3%

Add: Impact of present value of operating lease commitments (2)

1.5%

1.7%

Adjusted debt-to-total capitalization ratio

43.5%

38.0%

Adjusted debt-to-adjusted EBITDA multiple

In millions, unless otherwise indicated

Twelve months ended September 30,

2015

2014

Debt

$

10,486

$

7,841

Add: Present value of operating lease commitments (2)

668

583

Adjusted debt

$

11,154

$

8,424

Operating income

$

5,172

$

4,331

Add: Depreciation and amortization

1,147

1,025

EBITDA (excluding Other income)

6,319

5,356

Add: Deemed interest on operating leases

31

29

Adjusted EBITDA

$

6,350

$

5,385

Adjusted debt-to-adjusted EBITDA multiple

1.76 times

1.56 times

(1) Debt-to-total capitalization is calculated as total Long-term debt
plus Current portion of long-term debt, divided by the sum of total debt plus Total shareholders' equity.

(2) The operating lease commitments have been discounted using the
Company's implicit interest rate for each of the periods presented.

The increase in the Company's adjusted debt-to-total capitalization
ratio at September 30, 2015, as compared to the same period in 2014,
was mainly due to an increased debt level, reflecting a weaker
Canadian-to-US dollar foreign exchange rate in effect at the balance
sheet date and the issuance of $850 million of notes. The Company's
adjusted debt-to-adjusted EBITDA multiple also increased, which was
driven by the increased debt level as at September 30, 2015 as compared
to September 30, 2014, partly offset by a higher operating income
earned for the twelve months ended September 30, 2015, as compared to
the twelve months ended September 30, 2014.